Two hip nightclub owners from New York City, Travis (John Travolta) and Wendell (Arye Gross) are drugged and kidnapped while on their way to opening a nightclub in rural Nebraska. The KGB spy Cameron Smith (Charles Martin Smith) takes them to the Soviet Union, as "experts" on the "American lifestyle" with the intention of teaching KGB agents to be hip like Americans - and under the influence of drugs they think they have arrived in "Nebraska" to open the nightclub. Travis and Wendell are relocated to the phony burg of "Indian Springs", Nebraska which is actually located in the southeastern edge of the USSR near the Sea of Japan populated by Russians who "speak and act American", and where KGB trainees go to practice, but is mired in the 1950s. The KGB spy Smith is in charge of the "typical American town" constructed in the middle of the Soviet Union for espionage-training purposes and hopes that his fellow agents will learn real US culture. But things get out of control when Travis and Wendell immediately begin indoctrinating their fellow "American" neighbors in all the guilty pleasures of Yankee hedonism, turn a tiki lounge into a rock club, teach the townsfolk to dance, and introduce current pop culture. Both also flirt with local beauties. Things get dangerous when the townsfolk taste freedom, and the KGB decides to stop the experiment and get rid of the American "guests".